Email
Print
ShareMumbai: Tata Tele Maharashtra Ltd (TTML), the retail telecom arm of the Tata Group, would spend Rs1,250 crore for rolling out 3G and WiMax services in Mumbai and Maharashtra telecom circles, where it runs CDMA and GSM services.
The firm, which has received the shareholder approval to raise up to $250 million, has already spent Rs 1,000 crore on making its GSM network 3G ready.
"The funds will be raised through a combination of instruments such as foreign currency convertible bonds, global depository receipts and qualified institutional placements. We would spend the money for 3G and WiMax auction and also on capacity expansion," Mukund Rajan, TTML managing director, said on an analyst conference call.
The 3G and WiMax (BWA) auctions are to begin from January 14.
Since the Tata Group will be bidding for a pan-India 3G licence, TTML will pay the auction price for Mumbai and Maharashtra to it.
The company which adopted Tata DoCoMo's per second tariff plan for its GSM services in Mumbai and Maharashtra believes the current pricing is profitable.
"The current pricing is profitable in the long run. There are healthy margins to be made at these levels also. We believe rates, quality of network and brand appeal will sustain our subscriber base," Rajan said.
On whether there is scope for further tariff reduction, Rajan said, "You are leading me on. If rates are to go down further we are ready to compete."
Rajan said that the firm's tower division, Twenty First Century Infra Tele Ltd, which has 2,155 towers, is looking to achieve a tower occupancy mark of 2 from the current 1.5.
"The focus will be to increase the load (occupancy) on towers rather than increasing their number," Rajan said.
At the end of Q2 (Jul-Sept) 2009-10, the firm had a wireless subscriber base of 9.2 million, of which 3.5 million was from Mumbai circle and the rest from Maharashtra circle (other than Mumbai).
The firm saw an incremental subscriber addition of 33.7% compared with the first quarter this fiscal. TTML sold 670 crore wireless voice minutes in the Q2 FY10 showing a 6% rise sequentially and 62% rise year on year.
However, TTML's Ebidta (earnings before interest, taxation, depreciation and amortisation) reduced sequentially from 157.89 crore in the first quarter to Rs 121.09 crore in the second quarter. "The Ebidta drop is due to GSM expenses, subscriber acquisition costs and effects of swine flu that affected roll out of tower infrastructure," Rajan said.
